Tds on service tax for professional fees

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Jinal Shah (Querist)
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26 September 2014 Is TDS payable on service tax component of Professional fees remitted?
In case of reverse charge mechanism for legal fees, is TDS payable on service tax component?

Ankit

Ankit (Expert)
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26 September 2014 Dear Jinal,

You do not have deduct tax on the Service Tax component. CBDT has issued a notification on this

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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26 September 2014 TDS to be deducted on amount excluding service tax for all sections. The CBDT has issued Circular No. 1/2014 dated 13.01.2014 pointing out that the Rajasthan High Court has taken the view in CIT(TDS) vs. Rajashthan Urban Infrastructure that if as per the terms of the agreement between the payer and the payee, the amount of service-tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service-tax component u/s 194J of the Act. Pursuant thereto, the CBDT has decided in exercise of powers u/s 119 that wherever the terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component. Complete notification may be seen from below link--

http://law.incometaxindia.gov.in/DIT/Circulars.aspx

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Jinal Shah

Jinal Shah (Querist)
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26 September 2014 Thank you for replys,
But what if there is no terms of Agreement as such between the payer and the payee?

Ankit

Ankit (Expert)
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26 September 2014 Then jinal, you need to see the invoice. If the invoice has the Service Tax amounts mentioned separately, then you can release the amount without TDS on ST